Sunday, November 23, 2008

Yuan Watch : Ahhwoooo... Robberbarons of China

(And his hair was perfect. -AM)

By Chen Li 2008-11-24

The richest person on China's mainland, as named by Hurun Report this year, has been under police investigation since earlier last week.According to a China Securities Journal report yesterday, Huang Guangyu, chairman of Gome Electrical Appliances Holdings Ltd, is under investigation by Beijing police for alleged market manipulation.The Beijing-based newspaper cited unnamed insiders as saying that Huang was questioned for alleged manipulation of stock prices of Shandong Jintai Group Co, a medicine producer and Shanghai-listed company that is controlled by his brother Huang Junqin.However, Hong Kong-based Ming Pao Daily News quoted unnamed sources as saying that the probe on Huang Guangyu, also known as Wong Kwong Yu, was down to alleged acts of embezzlement and bribery that occurred early in his career.The Hong Kong newspaper reported that the 39-year-old founder of China's biggest home appliance chain was questioned with Zhou Yafei, chief financial officer of Gome, last Thursday afternoon. Huang Guangyu's wife Du Juan and other key finance officers of the company have already fled because of alleged involvement in criminal cases, Ming Pao reported, citing anonymous cell phone messages sent to reporters in Beijing on Thursday night. .The home appliance and property tycoon topped the list of the 1,000 wealthiest individuals on the Chinese mainland with assets estimated at US$6.3 billion, according to Shanghai-based analyst Rupert Hoogewerf last month.Earlier this year, Forbes named him the second-richest on the mainland, and estimated his net worth to be 18.36 billion yuan (US$2.69 billion). He rose from Forbes' 10th position in the 2007 list

Gome has more than 1,200 stores across 280 cities in the country and employs more than 200,000 people. Huang Guangyu, a native of Guangdong Province, left his hometown with his brother in 1985 when he was 17 years old. The two opened a 100-square-meter clothes shop called Gome in Beijing with 4,000 yuan worth of savings and loans of 30,000 yuan. The shop began to sell home electrical appliances in 1987.The brothers split up in 1993. Huang Guangyu focused on appliances while his brother focused on real estate.Beijing-based Caijing Magazine said in 2006 that the two brothers had been investigated by authorities for alleged involvement with an illegal loan that totaled 1.3 billion yuan from Niu Zhong'er, the former head of the Bank of China's Beijing branch.

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